Second, im asking tonight, can they get away with it . Im ali velshi, and this is real money. This is real money. You are the most important part of the show. So tell me whats on your mind by tweeting me at ali velshi. Major 25 billion deal in the pharmaceutical industry today. Three of the biggest names in drugs and Consumer Products engaging in a multi prong deal that will affect not just the value of your investments in the companies, if you have any broad based investments pharmaceuticals probably form a part of them, but also the drugs they develop in the basic Consumer Product you buy. As part of the deal, a joint consumers Goods Company that will sell some of the common brands that you buy, excedrin, bene fiber which keeps you regular. Stocks were up, and more importantly this might be a signal of more to come in the industry. Remember, the drug industry is partially this stuff, the consumer good stuff, but its mostly the big blockbuster drugs that take years and often billions of dollars to develop. Here are the details of the deal or i should say the deals. It will sell its vaccine unit to glaxco, and then selling its Animal Health business to eli lilly for 5. 4 billion. After all this is said and done, glaxco will be a bigger leader in sacks h vaccines, and eli lilly will be the second largest animal provider allowing each of these companies to build on their strengths while removing smaller noncorp or noncompetitive businesses. Now the backdrop to all of this is a potential deal that didnt happen and may not happen, but that got the Investment Community and the Pharma Industry all abuzz. Both companies are seeing sales fall as some of their top selling drugs lose patent protection. Li lipitor, and now the offer was rejected, and talks ended, but the rumor aoh loan has sparked a merger frenzy in the healthcare industry. The last time this much money was spent on drug deals was in in 2009 when pfizer bought wyatt in a deal valued at 64 billion. Merck acquired a corporation for 51 billion including some debt. What does it mean for you . Investigative journalist and contributor to Fortune Magazine who follows the pharmaceutical industry closely. Katherine, good to see you. Thank you. Is this a good deal between three Major Companies or is this a sign of more restructuring coming in the pharmaceutical industry. First of all, lets give this a new name. Lets call it swapasaurus. This is a huge deal in the industry. This is the long fall down from the pharma cliff. It is not business as usual in the pharm industry. The fancy helicopter rides and shrimp dinners are over and now the Big Pharma Companies are trying to figure out how theyre going to survive in these new environments. As joe jimenez was saying these companies are going to have to look ten years ahead to figure out how are they going to double down on their core strengths, get rid of stuff that is pulling down their bottom line and tighten the ship. Theyre looking at everything that they can do. A lot of Branded Companies are getting into generics, but its a whole new game. Its a whole new landscape. Generics make up 80 of the drug market. Right. It used to be that they would make their drugs, spend a lot of money on them. A lot of them would fail. But the big ones would be so big, and then generics will take that over, but now youre saying the big names are the generic drugs too. Yes, were seeing landscapes where patients cant afford to pay sky is the limit prices in drugs developed, and you see doctor revolts. There are doctor who is are saying were not going to recommend certain cancer drugs at a crazy price unless theyre Game Changers for their patients. Youre seeing incredible push back on price, and these Pharma Companies, they try to beat the price worriers at their own game, they couldnt, so theyre going to join them now. You mentioned the famous new york based cancer hospital. Cancer is wherethere has been a lot of development in cancer, advances, and thats where a lot of Companies Think the money is. Sure. If youre going to spend billions of dollars and years to invest in a drug, you either have got to have a high price tag for the drug or huge market or both. So these Pharma Companies have to identify what can they really bring with new molecules, new bubio logics, but i will say its a completely new landscape. These Pharma Companies are outsourcing their manufacturing. There are factories in india and china, and its a global day in the pharma sector, and they are going to figure out how can they be global. The Big Pharma Companies have maintained that its us who does the research, and it costs billions, and it turns out not to be effective. Without these bloc blockbusters at these prices, youll stop getting drugs. Right. Theyve been saying that for a long time, but you know what there are alternatives now. You can say that all you want all day long, but the market is just not going to bear that logic all that much more. You look at obamacare. If obamacare works out all its kinks youre going to get 30 million more patients who will have Prescription Drug coverage, but the government doesnt want to pay top dollar for all kinds of new fangled medicine. They want affordable generics. All of these companies have to recalibrate their inventory and their pipelines to look at what is the market really going to bear for these drugs. Great to talk to you. Katherine, a contributor at Fortune Magazine and author of dangerous doses. The true story of cops, count fetters and contamination of americas drug supply. The success in todays stock market, speed and location. I went for a firsthand look at wall street, and by wall street i mean new jersey. This high security building behind me is the New York Stock Exchange data center. Its here. Not on the floor of the New York Stock Exchange where almost all the trades take place. And here is one key part of the haling involved. Fiberoptic cable. Ill have more of my week long trading coming up. Plus on this earth day im taking to you the greenest city in america where well talk to the man in charge. That story and more as real money continues. Keep it right here. [ grunting ] im taking off, but, uh, dont worry. Im gonna leave the tv on for you. And if anything happens, dont forget about the new xfinity my account app. You can troubleshoot technical issues here. If you make an appointment, you can check out the status here. You can pay the bill, too. But dont worry about that right now. Okay. How do i look . Thanks. [ male announcer ] troubleshoot, manage appointments, and bill pay from your phone. Introducing the xfinity my account app. Xfinity watchathon week was the biggest week in televisionhone. History. But just when you thought it was over. What now . With xfinity on demand you can always watch the latest episodes of tvs hottest shows. Good news. Like hannibal. Chicago fire. And bates motel. The day after they air. Xfinity on demand. All the latest episodes. All included with your service. Its like hifiving your eyeballs. Xfinity. The future of awesome. On the next talk to Al Jazeera Oscar winner sean penn shares his views on privacy rights, press freedom and his controversial relationship with hugo chavez talk to al jazeera only on Al Jazeera America theres an arms race going on in the financial world right now. And this fiberoptic cable is weapons of choice. You will not believe the amount of money that theyre willing to spend on cables like this and other technology to shave just a few milliseconds off their trading times. The stakes are huge, and High Frequency traders know the key to profits is speed, and theyre waiting to pay big bucks for the privilege of being first in line. Back in the 1920s you would have to wait 20 minutes at a ticker tape to see the latest information about a stock. Now Trading Information is almost instantaneous. Traveling at nearly the speed of light. In fact, its so fast that only the Fastest Computers can keep up with the pace. This is the Trading Floor of the New York Stock Exchange, and its almost completely, humans arent needed at all any more. The vast majority of stocks arent traded here. To begin to understand how the stock market really works, you need to go across the hudson river to new jersey. Now the markets are almost completely computerized. Data networks and server farms at five key sites in new jersey are where most trades actually happen. Im in new jersey about 30 miles from manhattan. This high security building behind me is the New York Stock Exchanges data center. Its here. Not on the floor of the New York Stock Exchange where almost all the trades take place. If youre a high speed trader, and youre looking for a fraction of a second advantage you have to be as physically close to this server farm as you can. Thats called collocation. You pay to have your server in that building, and only the biggest players can do that. That shorter distance matters even if its only a few feet. Having a connection that is just one millisecond faster than your competition could mean an extra 100 million a year for High Frequency trader. Critics charge that this special collocation access offered by the ex changes is a form of front running, buy a stock before you and then selling it to you at a higher price, and its drawing the scrutiny of state and federal regulators who are concerned it might provide advantages unavailable to regular investors. High frequency trading depends on speed over Everything Else to be successful. In order to participate in that environment, you have to get direct feeds from all the exchanges. One of these exchanges will cost you 60,000 a month. Thats one. To participate at that level there are very few that can. Reporter but the need for speed does not end with colocation. High frequency traders are willing to pay for any micro second advantage they can get, even one between two different exchanges. Right now, for example, there is a fiber optic table linking the New York Stock Exchange servers in new jersey, and nasdaq servers in new jersey. But in the next few weeks a new higher speed Laser Network will begin to link the exchanges. The laser itself looks like wally, and uses Technology Originally developed for the department of defense. Wheit will have the time it takes to move price information between the two locations. Putting it in empirical terms, it will take 780 micro second round trip time to bring that about 360 micro seconds. Reporter to put that in perspective. Thats. 00036 of a savings. I am per acceptable to you and me but worth millions to a High Frequency trader. This quest extends from the time it takes stock information to travel from london to New York Stock Exchanges. There are 12 fiber optic tables crossing the atlantic. The last one engineered a decade ago. But a new fiber on tick route is being plotted that will follow a straighter line. Well shave off by building the new cable straighter from the existing cables 500 kilometers. It makes it 5 milliseconds faster. Reporter but building a new transatlantic fiberoptic cable is not cheap. The cost for the 5 millisecond advantage for High Frequency traders . 500 million. It will going through this little fiber here. So all this cable, the relevant part are the fiber hairs that youre looking at. Everything else is to protect these fiber hairs and to power the signal. Its fascinating to think that the 5,000 kilometers of this cable linking the two continents. Reporter and it doesnt end there. There is even talk of constructing a Laser Network across the atlantic using air ships. Weve loosely coined it as an air bridge. It is a succession of 30 blimps or High Altitude forms that will be geostationary at 70,000 feet talking to one another over this same Laser Technology and that will connect new york to london. It would do it in 30 milliseconds versus oh 60 in. The price tag for this transatlantic air bridge for the millisecond . 500 million. It looks like walle and what they call the race to zero and an ever increasing competition to limit the time it takes to make a trade. The players in this world are not afraid to spend big money. Last year they spend 1. 5 billion on technology to increase trading speeds. One thing is certain. In this quest for speed wall street is willing to pay a lot to make a lot. The senior policy adviser, he previously worked in various roles as a banker, trader, he understands market structures better than most people and says regulators need to address one important question. When does Public Information reach the Public Domain . John, good to see you. Thank you for being with us. Thank you, ali. I know you have to give our viewers a disclaimer because you work with the feds. Yethe chicago feds. Yes, i have to say that my opinions are my own and do not reflect the chicago or federal regulators. They understand how they get an advantage over other traders. How does thisdoes this some how trickle down and have a negative impact on regular investors . Well, i think it had a diminished affect on the Public Confidence in the way that markets that markets are used indirectly by most investors today invest in funds and people have 401k plans. You know, those are net outflow of funds in the stock market, and whenever there is adversity when people think theyre not getting a fair shake they tend to get out of stocks and into other financial instruments. There is a detrimental effect when Consumer Confidence is diminish ed. Someone said that the same thing when the telegraphs came in and when newspapers and telephone and computers. This is just technology. Its making the system more efficient, and generally speaking reducing the price of trades. Thats what people are sour grapes about. Well, yes, there is always going to be an advantage to being fast. I think the Public Policy questions that need to be addressed, and you touched upon it in your opening is when does Public Information actually reach the Public Domain . So if you did a trade, and your server is collocated in the data center, i think that you deserve to find out as soon as possible if the markets traded at ten because you did the trade, then the real question that needs to be answered is when does itits Public Information that the markets are traded. When does that information reach the Public Domain . And i think a reasonable person after there is a public debate about the issue. I think a reasonable person would say that that information reaches the Public Domain when that information reaches the al jazeera gateway or the lawyers gateway or the bloomberg gateway in a form that can be read by a human being. So if you wanted to equalize speed, the people who collocate in the serversorry, the people who collocate their servers in the data center, shouldnt that warrant part of the trade, they shouldnt get that information before you or i. When you say colocate, youre talking about when i was out there in new jersey showing the data center, collocating means these exchanges make money renting space adjacent to their own servers because it shortens the travel time between them. They could trade stocks faster than i can blink. Faster than i can recognize a written word. Thats where this becomes implicated. On one hand you admire the people who are able to come up with the algorithms to do this, but on the other hand if you think the system is stacked against you, this goes up that much further to say it is. Well, yes, there is the reality part and the Public Perception part. For the last two or three weeks the Public Perception part may be a little out of whack, but its good that the issues are being brought to the forefront , and people are being informed by programs like yourself. Every regulator in the country is now looking at this, and theyre saying they dont have the resources, they dont have the money to handle this. What would you suggest . Well, a couple of things. Regulators need to have a Public Policy debate on when does policy information reach the Public Domain . I think that there needs to be a review of three things in the u. S. Equity market, but it has to be a package. Its got to be payment for overthrow, regulation, and pools. You have to have all three in there. You know, you need to look at what are the motivations of all the people that serve the overflow, and why cant you or i find out where our order was actually filled . We have 13 security exchanges and 94, count them, 94 was dark pools. 93 was not enough. This is good conversation. Well have to pick it up again. Thank you for joining us. Thank you. Chief financial policy adviser in chicago. Well take to you two schools who offer graduate decrease in financial engineering. Theyre turning out the next level of traders wh